Will My Bankruptcy Haunt Me When I Try to Get a Car, House, etc.?
Believe it or not Bankruptcy will typically improve your chances of getting access to credit. We all know that a good credit score is what we usually need to get a house, car or loan. Most lenders look at your credit score as a strong indicator as to whether or not you are a good risk.
The 3 bureaus that report credit scores are Equifax, Transunion and Experian. They have been in the credit analysis business for longer than anyone. Their formula, although rather secret, gives the most relied upon credit scores in the US for lenders. That being said, what happens with your score when you file? It goes down right? ABSOLUTELY NOT. In all of the hundreds of reports I pull they almost always go up. That’s right, in my office usually 15 months after filing a Bankruptcy case I notice an average increase in credit scores of 25 points.
That’s not all, now the credit bureaus are not allowed to report any amount of debt discharged in your Bankruptcy because that is an attempt to collect on a discharged debt and violates the Bankruptcy Code.
So, if you look at your report today it probably shows $12,000, $15,000 or even more debt from judgments, credit card bills and medical bills. Today, no one wants to give you credit because they would need to stand in line to collect from you after everyone else on your report. After Bankruptcy, creditors know that you don’t owe anyone else and often feel more comfortable lending to you. After all, with a clean slate your only debt will be to them, you won’t be trying to pay off 6 other credit cards and they have 8 years (in the case of a Chapter 7 Discharge) to collect from you.
If you are interested in learning more about Bankruptcy call my office at 212-244-2882 anytime. We focus exclusively on Bankruptcy.